Yu said the company wants to raise funds for expansion on the back of the booming growth of the food retail business across the Philippines, which are being driven by overseas and Philippine-based Filipinos looking for investments and growing consumer demand.

“It will help us grow much faster,” Yu said.

Thus, he said the company would use the proceeds from the IPO for network expansion, facilities upgrade and also for future acquisitions.

FHI is the market leader in the Philippine food cart business. It was founded in 2002 when Yu opened his first kiosk in SM City Manila. The company soon began to open more branches in a few years’ time and introduced brands that have grown to be loved by Filipinos. It is now considered as the fastest growing food business in the country in terms of branches.

Under FHI, there are three operating companies. These are Fruitas Group Inc, which holds most of the brands; Buko ni Fruitas and Negril trading which houses the Old Jamaican Pattie Shop.

After making department store and convenience store purchases a breeze using cashless payments, Globe announced that its mobile wallet payment platform GCash is now accepted at select Fruitas stores.

Fruitas Holdings, Inc. (FHI), the leading group in the food cart industry in the Philippines, now accepts payments using the GCash scan-to-pay feature in its pilot stores in Metro Manila. This includes two Fruitas stalls, Johnn Lemon, and De Original Jamaican Pattie Shop and Juice Bar in Market! Market! Fiesta, Bonifacio Global City; Fruitas, De Original Jamaican Pattie and Juice Bar, and House of Fruitas in Metro Gaisano Market! Market!; and Buko ni Fruitas and Johnn Lemon in Ayala Marikina. This means that with the help of the GCash app, customers may now purchase their favorite Fruitas beverage using the QR (Quick Response) codes present in Fruitas stores.

By the end of 2018, Mynt, the mobile financial service company of Globe, is targeting to enable Fruitas Holdings Inc. to accept GCash payments in all its stores nationwide. GCash is the pioneer in electronic payments using QR codes.

“We recognize the need to adapt to trends; not only in introducing new offerings catering to the taste of Filipinos, but also in improving their total experience with our stores. Partnering with GCash allows our consumers to perform hassle-free mobile cashless transactions. We are looking forward to scaling as we ride on the ecommerce wave,” says Lester Yu, founder and Chief Executive Officer of Fruitas Holdings, Inc.

FHI continues to cater to the needs of consumers as it finds new ways and fresh concepts to bring accessible and healthy products to Filipinos. Through this partnership, Fruitas Holdings is able to display how it adapts to trends by integrating the cashless payment scheme.

“After SM Store and Mini Stop, it’s now the turn of Fruitas to experience what cashless payments using GCash can do to their brand. We’ve seen long lines of people queuing at Fruitas outlets just to enjoy their products. With GCash, we can definitely cut those long lines in order for more people to enjoy Fruitas (for) as fast and simple as a tap and scan on their phones. Using GCash means better business for Fruitas,” declares Anthony Thomas, chief executive officer of Mynt.

“Cashless payment using mobile phones is still largely in its infancy stage in the Philippines but it’s getting to be more popular and soon will be widely accepted. We are glad to be at the forefront of this technology, which is all part of our objective of creating wonderful services for all our customers,” says Ernest Cu, president and Chief Executive Officer of Globe.

Late last year, the GCash scan-to-pay feature became available at all SM Store outlets and at all Mini Stop convenience stores nationwide in order to promote cashless payments in the country.

In order to purchase using GCash, customers with an iPhone or Android smartphone simply need to download or update to the latest version of the GCash app. Once the app is downloaded, customers only need to register an account and fund their GCash wallet by loading funds through any of the more than 12,000 GCash partner outlets nationwide.All the customers have to do is tap Scan QR and point their phone’s camera at the store partner’s QR code, to pay.

As an introductory promo to GCash users, those who pay using the app will be able to enjoy 10% cash back in each of the nine pilot stores of Fruitas Holdings, per day. The promo lasts until March 31, 2018.

GCash is operated by Mynt, the financial service company owned by Globe Telecom and Ant Financial Services Group, one of the world’s leading digital financial services providers, and Ayala Corporation.

From the start, food and beverage conglomerate Fruitas Holdings Inc. has observed a code of honor—a tradition that instills integrity in the workplace and keeps deals honest with customers and suppliers.

This code of honor was patterned after the Philippine Military Academy’s decorum of refraining from cheating, thieving and lying.

This was the mindset when banker and entrepreneur Lester Yu established Fruitas as a simple cart business in 2002. After more than a decade, Fruitas has matured into one of the most outstanding foods and beverage firms in the Philippines with 18 brands to its label and almost 900 stores across all brands.

Acquisition of more brands is Yu’s current addiction. Yu, who studied at De La Salle University and University of the Philippines, serves as the chief executive of the company.

“My addiction is accumulation of business, to become bigger and bigger. You gain power and you used that power to help other people. There is a higher purpose than this,” he said, adding that becoming a bigger business also has a social cost.

“Honesty, integrity and hard work are the most fundamental foundation of any business. I believe this is the reason why we have managed to grow and expand. We do not cheat, lie, steal or tolerate among us those who do so. That has been our guidance in our expansion and acquisition program. We want to acquire more brands to be at the top of the game,” said Yu, quoting the adage borrowed from the PMA.

Its flagship brand Fruitas remains the company’s top business with over 200 stores nationwide.

In an effort to understand the nuances of the market and better respond to market demand, the company classified the brands into three categories—the leading brands, challenger brands and the niche brands.

Fruitas, Buco Loco, Buko ni Fruitas, John Lemon and The Original Jamaican Patty Shop are considered leader brands on their own, while challenger brands such as Black Pearl and Friends Fries provide other brands of similar products a run for their money.

Catering to small, select markets are homegrown brands Magnifico Pizzeria and Shou La Mien, among many other brands.

The company also ventured into food parks and now manages three in Quezon City. Expansion to the south is being considered.

Yu said the incessant growth is key to surviving competition.

“We want to be the number one company in the Philippines for some of our brands. We’re not in a hurry to get there, but we certainly do what it takes to get our brands to the top of the competition,” he said.

Yu’s previous business ventures did not become as successful. What little he saved from working in a bank, he put it a cart called Fruitas.

The secret, he said, is not a secret at all, as many businessmen and investors knew this all along.

“One only needs to believe in their products and the virtue of working hands on. In growing the business, most of the time I lose sleep. There was no time for nightlife. My social circle is limited to my family and co-workers,” Yu said.

The growth of Fruitas Holdings is not something that happened overnight. A number of influences left an indelible mark on Fruitas. Success stories of small businesses continue to inspire Fruitas.

Of the most successful business models Yu looked up to, the Jollibee Group and Mercury Drug topped the list.

He cited how Jollibee created a huge network of successful stores and how it managed to acquire companies that were even bigger than it was years ago.

For Yu, the story of how Mercury Drug was able to succeed without resorting to franchising had the biggest impact on him as an entrepreneur.

This path, he said, is where Fruitas would like to position itself as a growing small food and fresh beverage conglomerate.

Yu said he is a not big fan of franchising, although he respects and acknowledges the concept as an effective tool to expand a brand with less capital within a short period.

In fact, a handful of brands within the Fruitas Group of Companies experimented on franchising, but the bigger chunk or about 80 percent to 85 percent of the store network still company-owned.

Yu said he wants all his brands and stores to be all company-owned. From carts or kiosks, the company expanded to having in-line stores inside the malls.

Over the past 16 years, the local market has been kind to homegrown SMEs like Fruitas Holdings such that revenues in 2016 hit half a billion pesos. It doubled in 2017 to P1.2 billion, with a net income of P142 million after tax.

“Among the food and beverage companies, we have, if not one of the healthiest, the healthiest financial statements. Payback is guaranteed within three years. We can even do that in 18 months. We have the presence in all the regions except Marawi, but we’re building there,” Yu said.

Fruitas is hoping that the uphill trend of high double-digit growth will continue as the store network expands.
To sustain this growth, the company plans to raise as much as P2 billion by going public, given the healthier, more robust market outlook in the first quarter of 2019.

“We want to offer a good price, maybe less than P5 apiece. Our underwriters—First Metro Investment and BDO Capital are working out the fine prints,” Yu said.

Proceeds from the offering, he said, will be used to modernize all four commissaries, expand the store network and acquire more brands. Beyond the commissaries, a research and development facility will be added to the capital assets.
A small portion will be allocated for debt payment, which is very minimal, he said.

“With the new funding, we’re looking at opening 150 to 200 stores yearly. If not the only one, we are the most active among small companies when it comes to acquiring brands. Because of the strength of our store network and the sheer number of brands we have, we consider ourselves not small anymore. We’re an SME, but still an underdog. We’re a small company who likes to think big,” said Yu.

FOOD CART OPERATOR Fruitas Holdings, Inc. (FHI) looks to expand its footprint outside Metro Manila, given the economic growth in the provinces, and at the same time, introduce new brands.

FHI said on Tuesday that it has already opened 70 stores within Visayas and Mindanao as of September, bringing its total store count to 849. Its new markets include Cebu, Davao, Dagupan, Leyte, Iloilo, and Cagayan de Oro.

Alongside the opening of more stores, it has also introduced new food brands namely Cascades Lifestyle Park, UVA, Chikenini, and LA Steak.

This is in addition to more than 20 brands already under its portfolio, such as Fruitas Fresh From Babot’s Farm, Buko Loco, Juice Avenue, Buko ni Fruitas, The Mango Farm, Johnn Lemon, and Black Pearl, among others.

“Fruitas Holdings plans to further strengthen our footprint outside Metro Manila. We have been doubling our number over the past years and would like to sustain this momentum,” FHI President and Chief Executive Officer Lester C. Yu was quoted as saying in a statement.

The company noted that it has been able to almost double its store network in the past two years, ending 2017 with more than 750 stores, around 81% higher than what it had in the previous year. It also closed 2016 with 415 stores, 60% more than its footprint in 2015.

FHI’s store expansion has been driving its financial performance in the past years. In 2017, it delivered P1.2 billion in consolidated sales, jumping 130% from what it generated in the same period a year ago.

While focusing in expansion efforts, FHI has also recently partnered with mobile payment services provider GCash for Scan-to-Pay features. The cashless payment feature is currently available 45 FHI pilot stores, but will be launched across all the company’s brands by the end of the year.

“To advance the growth of our physical stores, we also plan to grow with technology through GCash. It will be an opportunity for us to provide an easier and more efficient payment system and create a better experience for our consumers,” Mr. Yu said.

Earlier this year, Mr. Yu announced his plans to raise P2 billion through an initial public offering at the stock market to fast track the company’s expansion.